NAMA was just one part of what should have been a three part process

The FT’s editorial yesterday second leading article was entitled In Praise of NAMA. Their logic being that NAMA was the first element in what it proposes as a necessary three part process, that is to force the banks must come clean on their losses. But that it failed to take the second and third steps, ie make a political decision about who should carry those losses and to develop ‘the legal, technical and political capacity’ to impose those losses:

Nama did crystallise banks’ losses – insufficiently, but more than any other country. Dublin’s fatal mistake was failing to take the other two. Promising to make senior creditors whole was an undertaking Dublin could not afford even though it has indentured its citizens by trying. On the third step, it has dithered on implementing special insolvency legislation. In sum, Ireland tried to cross a chasm in one short jump. [Emphasis added]